Available - University of Western Sydney

ESTOPPEL AND
TESTAMENTARY
SUCCESSION – RECENT
DEVELOPMENTS
Dr Stephen
Janes
B a rri ster
Deputy Dean
School of Law
Un i ve r sit y o f
We st e r n
Sydney
INTRODUCTION
A person may make many types of
representations about what will happen to
their property upon death.
In what circumstances will these
representations be binding upon the estate?
The representation may constitute:
A testamentary contract (including a mutual
will)
Estoppel
TESTAMENTARY CONTRACTS
Testamentary Contracts are in all respects
contracts but are constituted by promises as
to one’s testamentary dispositions
supportable by consideration.
Testamentary Contracts comprise:
Contracts to leave specific property by will to
another
Contracts to leave the entire estate to another
Contracts not to revoke a will
Mutual wills
CONTRACTS TO LEAVE PROPERT Y
 Example: A promise to leave specific reality by will in return
for a promise to marry; Synge v Synge [1894] 1 QB 466.
 Specifically enforceable in equity. If property left otherwise
than to the promisee then a beneficiary who takes under a
will contrary to the promise holds the gift on a constructive
trust for the promisee.
 Enforceable at common law by way of damages for breach of
contract being the value of the property at death.
 The promisee may elect as to whether to proceed in equity or
at common law.
 The promisee may proceed during the lifetime of the promisor
if aware of the breach of the promisee but if seeking damages
these will adjusted for contingencies.
CONTRACTS TO LEAVE THE ENTIRE ESTATE
Is a promise only to leave what is left at death
and not to preserve property until death;
Palmer v Bank of New South Wales (1975)
133 CLR 150.
The contract will be breached only if the
promisor makes in their lifetime what is in
substance a testamentary disposition contrary
to the promise; Palmer v Bank of New South
Wales (1975) 133 CLR 150 at 159 per
Barwick CJ but c.f. Birmingham v Renfrew
(1937) 57 CLR 666 at 689 per Dixon J.
MUTUAL WILLS
 The parties intend to enter a legally binding agreement as to the
disposition of their respective estates; Birmingham v Renfrew
(1937) 57 CLR 666. However there must be clear and
satisfactory evidence of the agreement; Walters v Olins [2009]
Ch 212 at [36].
 Example: A husband promises that if he survives his wife then he
will leave his estate to a designated third party. The wife in
response to this promise then promises to make a will leaving
her estate to her husband and vice versa.
 If the husband survives the wife and takes her estate but the
changes in his will in favour of other beneficiaries then equity
will compel these beneficiaries to hold their gift on a
constructive trust for those designated to benefit under the
mutual will agreement.
 The equity arises as a result of the husband allowing his wife to
die believing the agreement will be fulfilled.
MUTUAL WILLS - PROOF
 T h e m u t ua l w i l l a g r e e m e n t n e e d n o t b e c o n s t i t ute d i n a f o r m a l w r i t te n d o c ume n t .
I t m ay a r i s e f r o m d i s c us s i o n s b et w e e n f a m i l y m e m b e r s ; A l b r ow v C u n n i n g h a m
[ 2 0 0 0 ] N SWS C 1 0 3 . S o m e f a c to r s to c o n s i d e r :
 To h o w m a ny p e o p l e t h e s t a te m e n t w a s m a d e
 W h et h e r t h e r e i s a s t a te m e n t i n w r i t i ng
 T h e c o n s i d e r a t i o n o f fe r e d f o r t h e p r o m is e
 T h e n u m b e r o f t i m e s t h e s t a te m e n t w a s m a d e
 The language used by the parties
 T h e c o n tex t i n w h i c h t h e p r o m i s e w a s m a d e
 T h e n a t u r e o f t h e r e l a t i o n s h i p b et w e e n t h e p a r t i e s
 T h e c e r t a i n t y o f t h e te r m s
MUTUAL WILLS - BREACH
 It has been held that to transfer a property inter
vivos, but continue to live in it and pay the rates and
charges, if done with intent to defeat the agreement
is sufficient to constitute a breach of a mutual will
agreement; Bauer v Hussey [2010] QSC 269 at [32]
but this is inconsistent with Palmer but in line with
Dixon J in Birmingham.
 Disposal of property by the survivor of a mutual will
agreement that is the subject of the agreement may
constitute a breach of that agreement that could be
restrained by injunction in the lifetime of the
survivor; Walters v Olins [2009] Ch 212 at [42].
ESTOPPEL - GENERAL
 Certain representations as to a persons testamentary wishes not
amounting to a contractual promise may give rise to a
proprietary estoppel.
 By contrast to promissory estoppel which arises from an existing
legal relationship usually a contract but need not relate to any
proprietary interest. The distinction between the two has been
removed in favour of equitable estoppel; Waltons Stores
(Interstate) Limited v Maher (1988) 164 CLR 387.
 As Hoffmann LJ said in Walton v Walton (unreported) 14 April
1994; [1994] CATranscript No 479, para 21 ,
equitable estoppel [by contrast with contract] . . . does not look forward into
the future [; it] looks backwards from the moment when the promise falls due
to be performed and asks whether, in the circumstances which have actually
happened, it would be unconscionable for the promise not to be kept.
 There must be assurance, reliance and detriment to establish
proprietary estoppel; Thorner v Major [2009] 1 WLR 776 at [55].
EQUITABLE ESTOPPEL
 In Waltons Stores (Interstate) Limited v Maher (1988) 164
CLR 387 at 428-29, Brennan J stated that to establish
equitable estoppel:
 the plaintiff assumed or expected that a particular legal relationship
would exist with the defendant and the defendant would not be free
to withdraw from that relationship;
 the defendant induced the plaintiff to adopt the assumption or
expectation;
 the plaintiff acts or abstains from acting in reliance on the
assumption or expectation;
 the defendant knew or intended him to do so;
 the plaintiff's action or inaction will occasion detriment if the
assumption or expectation is not fulfilled;
 the defendant has failed to act to avoid that detriment.
ESTOPPEL – TESTAMENTARY SUCCESSION
The difficulty with testamentary
representations amounting to an estoppel was
the notion that a will is always understood to
be revocable.
Early cases focused upon the need for an
irrevocable promise. This approach was
rejected in Gillet v Holt [2001] Ch 210 in
favour considering whether allowing the
testator to go back on the representation
would in all the circumstances be
unconscionable.
THE REPRESENTATION
 Must be in respect of identifiable property to be sufficiently
certain; Thorner v Major [2009] 1 WLR 776.
 The property may change over time but it still must be
identifiable.
 Must be as to future intention not present intention;
 May arise by way inference from statements and conduct;
 However there must be evidence of representations by the
testator and not by a third party such as a deceased parent who
was a prior owner of the property; Hampson v Hampson [2010]
NSWCA 359.
 What matters is whether the representation could in all the
circumstances be reasonably understood as intended to be relied
upon by the representee. The actual act of reliance need not be
foreseen; Thorner v Major [2009] 1 WLR 776 at [5].
RELIANCE AND DETRIMENT
 There must be detrimental reliance. This need not be
expending money or financial detriment but it must be
something substantial; Gillet v Holt at 232.
 It is the substantial detrimental reliance that gives rise to the
issue of whether it would be unconscionable to allow the
representor to go back on the representation. Mere
disadvantage is not enough; Duic v Duic [2013] NSWCA 42 at
[20].
 A person does not need to show there was some alternate
course of action that would have been open to them; Wardell
v Wardell [2012] NSWCA 214 at [67].
 The estoppel can arise in the lifetime of the representor such
as where property is disposed of or there is a change in
testamentary intention; e.g. Gillet v Holt
REMEDIES
 In the determination of the relief to be granted in equitable or
proprietary estoppel cases, the notion of enforcement or
vindication only of the “minimum equity” is not a governing
principle, rather relief should be based upon what is necessary
to remedy the unconscionable conduct; Giumelli v Giumelli
(1999) 196 CLR 101 at 123–125.
 Matters that can assuage the detriment brought about by the
resiling from the representation or encouragement by the party
concerned are relevant to such determination; Delaforce v
Simpson-Cook (2010) 78 NSWLR 483 at [3 ]; [6]; [59].
 Proportionality may be relevant but normally the court will give
effect to the expectation in land that has been created by the
defendant’s conduct; Ramsden v Dyson (1866) LR 1 HL 129 at
170 per Lord Kingsdown.
 Equitable compensation may be awarded in some cases as the
most appropriate remedy even in the lifetime of the representor
but subject to a discount; Quinn v Br yant [2012] NSWCA 377.
CONTINGENCIES
 The principal contingency that ef fects both a promissee under
a contract and the representee under an estoppel is a claim
for a Family Provision Order.
 Distinction drawn in Barns v Barns (2003) 214 CLR 169
between inter vivos promises and testamentary promises.
 A testamentary contract is subject to a FPO as Chapter 3,
Succession Act 2006 operates upon then net estate of the
deceased being the property available for distribution under a
will or on intestacy.
 By analogy estoppel based upon testamentary representations
is so subject to an FPO as the representation relates to the
distributable estate.
THANK YOU
QUESTIONS?